Getting Started

Welcome to the official documentation page of Deri Protocol

What is Deri Protocol?

Deri Protocol is a decentralized protocol for users to exchange risk exposures precisely and capital efficiently. It is the DeFi way to trade derivatives: to hedge, to speculate, to arbitrage, all on chain.

This is achieved by liquidity pools playing the roles of counterparties for users. With Deri protocol, risk exposures are tokenized as non-fungible tokens (NFT) so that they can be imported into other DeFi projects for their own financial purposes. Having provided an effective on-chain mechanism to exchange and hold risk, Deri Protocol has minted one of the most important blocks of the DeFi infrastructure.

While there are already derivatives solutions for crypto, most of them are either centralized or insufficient to meet the needs and demands of potential DeFi clients. Simply speaking, the ultimate solution to exchanging risk exposures in the crypto world has to be something original and organic within the blockchain. And that's exactly what Deri Protocol stands for!

What makes Deri Protocol so special?

As the solution to decentralized derivative exchange, Deri Protocol is designed with all the defining features of DeFi and financial derivatives in its nature

  • Real DeFi: Deri Protocol is a group of smart contracts deployed on the Ethereum blockchain, where the exchange of risk exposures takes place completely on-chain.

  • Real derivative: The PnL’s of the users’ positions are calculated with mark price updated by oracle, which ensures precision; positions are maintained by a margin, which provides built-in leverage.

  • Composability: Positions are tokenized as non-fungible tokens (NFT), which can be held, transferred or imported into any other DeFi projects for their own financial purposes (as blocks in their own “lego game”).

  • Openness: anybody can launch a pool with any base token (but usually with a stablecoin, e.g. USDT or DAI). That is, the protocol does not enforce any specific “in-house chip”.

  • Simplicity: Deri protocol adopts an extremely simple trading process.

  • Intercompatibility: $Deri Token is intercompatible and supports three different Blockchains through our unique Cross-Chain Deri Bridge. (Ethereum, Binance Smart Chain, and Huobi Eco Chain)

Since the v2 update, three additional features have been introduced to significantly increase capital efficiency to an extreme level:

  • Dynamic mixed margin: Accepts traders to choose one or more from the supported base tokens to post as margin

  • Dynamic liquidity providing: Accepts liquidity providers to choose one or more from the supported base tokens to provide as liquidity

  • Multiple trading symbols in one pool: Supports multiple trading symbols within one single pool

To get a deeper insight into the new features of v2, check out our Deri Protocol v2 introduction or our v2 whitepaper.

Key Roles

Our ecosystem is an entity made up of a variety of essential contributors and Key Roles, each performing an important task.

  1. Liquidity Providers Liquidity providers provide liquidity to the pools to gain transaction fees, funding fees and DERI awards etc. and are therefore playing the counterparty of the traders.

  2. Arbitragers Arbitragers are a special type of trader, which are induced by funding fee arbitrage to balance the two sides of long and short positions.

  3. Position liquidators When a position is breaching the liquidation line, a liquidator can pay the gas to liquidate the position and share part of the position’s remaining margin as an award.

What is a derivative in finance? A derivative is a contract that derives its value from the performance of an underlying entity, also called underlying, which can be an asset, an index or an interest rate. Investors/traders typically use derivatives for 3 reasons: to hedge, to increase leverage, or to speculate on an asset's movement